Separations, sorting, and cyclical unemployment

  • Mueller A
  • 51

    Readers

    Mendeley users who have this article in their library.
  • 2

    Citations

    Citations of this article.

Abstract

This paper establishes a new fact about unemployed over the U.S. business cycle and evaluates a number of the compositional changes in the pool of theories that can potentially explain it. Using micro-data from the Current Population Survey for the years 1962-2011, it documents that in recessions the pool of unemployed shifts towards workers with high wages in their previous job. Moreover, it shows that these changes in the composition of the unemployed are mainly due to the higher cyclicality of separations for high-wage workers, and not driven by differences in the cyclicality of job-finding rates. A search-matching model with endogenous separations and worker heterogeneity in terms of ability has difficulty in explaining these patterns, but an extension of the model with credit- constraint shocks does much better in accounting for the new facts.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Authors

  • Andreas I. Mueller

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free